Iowa Supreme Court cuts damages in $8 million libel case

The Iowa Supreme Court reduced damages from $11 million to nearly $3 million in a libel suit against an Iowan who brought charges against his former employer. The lack of sufficient evidence of the employer’s loss of earnings and the current social media climate played a role in the court’s reasoning.

After being fired for alleged misconduct and insubordination at work, Scott Clark took to Facebook to file repeated charges against DIY AutoTune CEO Jerry Hoffmann, the court heard.

“Clark broadcast his false claims on social media and podcasts to tens of thousands of people,” the court said in its unanimous opinion. opinion. “He said Hoffmann was dishonest and engaged in kickbacks. He falsely reported that Hoffmann knowingly sold dangerous products out of greed.

During the case, Clark defied court orders, jail time and a mutual agreement with Hoffmann not to criticize each other outside of litigation, the Iowa Capital Dispatch reported. According to the court’s opinion, Clark’s response and counterclaims at Hoffmann’s trial were dismissed, leaving it to the jury to decide what Hoffmann would receive in damages. The court also found that Clark repeatedly threatened to harm Hoffmann unless he received payment.

In the notice, participating judges said Clark engaged in “an intentional, long-term, bad faith campaign of self-deception that caused emotional harm,” but also that some of the damage -interest of the jury was “flagrantly excessive”.

Judges said the jury erred when it appeared to charge Clark and his company, RealTuners, $4.1 million in damages based on the amount of income Hoffmann allegedly lost as a result of diffamation. Instead, they ruled the jury should have based its decision on the shortfall.

The court found that Hoffmann provided “extremely rare” evidence of lost profits, except for a business relationship he said he lost because of Clark. Based on this, they reduced the special damages to $100,000 and the punitive damages accordingly.

The court agreed with the jury that people should be able to receive damages for making false statements that likely damage their reputation, even if they cannot prove the actual damage. It’s called defamation per se, and it only requires proof of general damages, not special damages, the judges said.

The judges cite a an article of law That said, this standard is arguably “more necessary than ever” in the current climate, where accusations can spread quickly on social media.

The judges noted that in a previous decision, Bierman v. Weier, they had dismissed the idea that people can react quickly to defamation on the Internet and not suffer much harm. In this decisionthe court was “unconvinced…that the Internet’s ability to restore reputations matches its ability to destroy them”.

The judges also accepted damages that the jury said Clark should pay for alleged breach of contract, breach of fiduciary duty, civil extortion and attorneys’ fees.

Hoffmann’s attorneys can now decide whether to accept damages reductions or seek a new trial, depending on the court’s opinion. During oral argument, Hoffmann’s attorney said his client preferred to accept modified damages, but did not specify a particular amount at the time.

Hoffmann’s attorneys could not immediately be reached for comment.

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